“For all he’s talked about repealing and replacing Obamacare, he hasn’t ever gotten specific about what he’d replace it with,” said Randy Parrish, a high-yield portfolio manager at Voya Investment Management, which oversees more than $208 billion. “So you’re not quite sure what that’s going to mean, or who benefits and who gets hurt.”

Republicans who maintained control of the House and Senate have also promised to repeal the Affordable Care Act. Passed under President Obama in 2010, Obamacare created markets where individuals can buy health insurance, often with subsidies, and gave states funding to expand their Medicaid programs to more low-income people. It also changed insurance regulations, added taxes and fees on the health industry and cut payments to hospitals in exchange for the promise of more patients.

‘On the chin’

HCA Holdings Inc. followed Community Health’s drop, down 13 percent, while Tenet Healthcare Inc. slid 25 percent.

“Stocks are really taking it on the chin, because the market abhors uncertainty,” said Sheryl Skolnick, an analyst at Mizuho Securities who covers hospital companies. “We know this is the worst possible outcome, but we don’t know how bad it is.” She downgraded some hospitals and health services companies she covers, including HCA.

Bonds plunge

Community Health ranked among the biggest losers in corporate bond trading, with its $3 billion of 6.875 percent notes due 2022 down 6.9 cents to 70 cents on the dollar at 2:12 p.m. Tenet’s $1.9 billion of 6.75 percent notes due 2023 fell 5 cents to 88.25 cents.

A repeal of the Affordable Care Act would result in “confusion and problems if not accompanied by a clear path to a new plan,” Moody’s Investors Service analysts led by Robard Williams wrote in a report Wednesday. Fitch Ratings analysts wrote that they foresee a negative impact on credit for health-care providers due to a decline in insured patients, which would also cause some pain for the drug industry.

Bonds of Tenet and Community Health trade at distressed prices in large part due to concerns about shrinking profits. They generate about 11 percent of their earnings before interest, taxes, depreciation and amortization from Obamacare, including Medicaid expansion and public exchanges, said Jason McGorman, a Bloomberg Intelligence analyst who covers healthcare. Less Ebitda means less money available to pay debt.

“A lot of that Ebitda would disappear” if Obamacare is repealed, McGorman said. “And Community Health has already had a lot of downward pressure on Ebitda.”

Community health

Community Health has $15 billion in debt, with large chunks starting to come due in 2018 and much of it trading at deep discounts after two consecutive quarterly losses. The company has been trying to dig itself out of debt by selling assets, but its poor earnings and distressed debt mean many rivals likely aren’t interested in a takeover.

“With Community Health, it’s a company problem,” said Kathleen Gaffney, a portfolio manager at Eaton Vance. “Having said that, with the Trump win, it certainly doesn’t make it a positive backdrop for hospitals.”

Insurers drop

Many of the publicly traded health insurers have already pulled back from Obamacare’s individual markets, meaning that the harshest impacts of repeal could be limited to companies that have stayed in the markets or benefited from the expansion of Medicaid.

Along with Centene, Anthem Inc. and Molina all have large Medicaid businesses.

Among the other large insurers, Humana Inc. and UnitedHealth Group Inc. will benefit from a trend toward using the private sector, rather than government programs, to deliver health-care in a Republican administration. Both firms are big players in the private health program for the elderly known as Medicare Advantage.

“On privatization, you have a tailwind,” said Ana Gupte, an analyst with Leerink Partners who covers insurers. “You don’t have a threat of single payer or a public option.”

Targeted change

For Obamacare, one possibility is that instead of wholesale repeal, large portions of the law stay in place, with Trump and Republicans in Congress targeting only parts. Aspects of Medicaid could also be privatized, which could preserve some business for insurers under the program.

“The ultimate fate of ACA and/or select components will not be sorted out in short order but rather over many months and possibly years,” said Thomas Carroll, an analyst with Stifel Financial Corp. “These companies had strong operations and business models before ACA, and will after.”

Clinton’s proposals

During the campaign, Clinton was a regular critic of high prices of prescription drugs, and she has called for policies such as penalties for some drugmakers whose increases are too frequent or drastic. Trump has also criticized the high cost of prescription drugs, saying individuals should be allowed to import cheaper pharmaceuticals from abroad.

It’s possible Trump or Republicans in Congress might act on drug prices, and even without action, pressure on U.S. drug prices probably will continue, GlaxoSmithKline Plc CEO Andrew Witty told Bloomberg TV on Tuesday.

“A lot of people fixate on the political dimension and what might happen,” Witty said. “It’s also important to remember that the marketplace has itself put in tremendous mechanisms to ensure it gets good value for money.”

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